Melbourne will become the first Grand Slam host in the world to boast three undercover courts under a major redevelopment of the Melbourne Tennis Centre.

Premier John Brumby unveiled details of the $363 million first stage of the redevelopment on day two of the Australian Open tennis today.

The plans include a facelift of Margaret Court Arena - including the installation of a retractable roof and an extra 1500 seats - as well as a new eastern plaza next to Hisense Arena and 21 new courts. Rod Laver Arena and Hisense Arena will also be refurbished.

It will make the first Grand Slam of the season the only major tournament to boast three covered courts -- Rod Laver Arena and Hisense Arena are the others.

The State Government says the revamp will ensure the event stays in Melbourne beyond 2016, preventing rival cities like Shanghai or Dubai from poaching the tournament.

“Importantly it locks in the Open until at least 2036,'' Sports Minister James Merlino said.

Stage one works will begin in April and take about five years to complete.

The Melbourne Park masterplan is a 10- to-15-year project.

Mr Brumby said the Australian Open was the biggest annual sporting event in the southern hemisphere and the revamped venue would make Melbourne the only grand slam host with three undercover courts.

“This will allow Melbourne to run the most weather proof grand slam event in the world,'' he said in a statement.

"The Open is the biggest sporting event anywhere in the world for the month of January and is the largest annual event anywhere in the southern hemisphere,'' Brumby said in a statement.

"That's why the Victorian government is making this significant investment to keep this prestigious tournament in Victoria.''

Melbourne Park's contract to host the event expires in 2016 and there are fears it will then be vulnerable to cashed-up rivals in Asia and elsewhere seeking the prestige of staging a tennis major.

Shanghai, Dubai, Madrid and Sydney have all previously expressed keen interest in hosting the tournament.

"The world's best players love coming to Melbourne and our significant investment in Melbourne Park will guarantee the Australian Open remains in Melbourne until at least 2036,'' Mr Brumby added.

The Open has been played exclusively in Melbourne since 1972, moving from the grass courts of Kooyong to the purpose-built hardcourt venue at Melbourne Park in 1988.